Offshore Jurisdiction Review: Andorra

(Editor's note: The information in this article is based on Streber's personal experiences and has not been independently verified. As always, do your own due diligence.)

Andorra is a tiny nation in the Pyrenees Mountains between Spain and France. This beautiful and friendly nation is one of three principalities (countries ruled by royalty) in Europe; the other two being Monaco and Liechtenstein.

What do all three of these European principalities have in common? They are all popular offshore jurisdictions.

Andorra is a quiet country. Keeping a low profile and keeping to themselves is the Andorran way of life.

Born from the remnants of buffer states, collectively called Marca Hispanica, set up by Charlemagne to keep the Moors at bay, Andorra's history begins somewhere in the 9th century.

In the year 1278, rule over Andorra was divided between a French count and a Spanish bishop. This has been maintained to this day, although the rule is now shared between a Spanish bishop and a French president, rather than a count.

France briefly invaded Andorra in the 1930s, following civil unrest after a Russian nobleman tried to proclaim himself the prince of Andorra.

In 1993, Andorra enacted a new constitution which greatly reduced the powers of the two co-princes (the Spanish bishop and French president). Civil rights were greatly expanded.

Today, Andorra is one of Europe's most prosperous nations, with an economy that relies largely on tourism (skiing) and financial services.

Offshore Company Incorporation

Andorran companies enjoy low tax rates, but it is, generally speaking, not a popular incorporation jurisdiction. Andorran incorporation requires at least one resident director, and the costs are higher than most other jurisdiction.

Offshore Banking

Banking is what Andorra is known for, and rightfully so, especially private banking (i.e., personalized banking for high net worth individuals).

The Institut Nacional Andorrà de Finances regulates the six banks in Andorra:

  • Andorra Banc Agrícol Reig, SA (Andbank)
  • Crèdit Andorrà, SA
  • Banc Sabadell d'Andorra, SA
  • Mora Banc, SAU
  • Mora Banc Grup, SA
  • Banca Privada d'Andorra, SA

Crèdit Andorrà and Banca Privada d'Andorra (BPA) are the banks primarily used by non-residents, although all banks are more or less open to non-residents.

BPA is strictly about private banking. Their sleek all-black branches are hard to miss, as they contrast against the otherwise colorful buildings of the Andorran capital. A minimum deposit of 500,000 EUR is expected, but they will settle for far less in some cases.

Crèdit Andorrà, listed as one of my Best Offshore Banks in 2012, is suitable both for private banking and personal, day-to-day banking. Private banking starts at 500,000 EUR but, as with BPA, this amount is negotiable. Crèdit Andorrà also has a branch in Panama, and you can open an account in Panama from the Andorran office.

Andorran banks are well-regulated and take a conservative approach to investments. While no bank is entirely immune to insolvency, Andorran banks are among the least likely to become insolvent.

Though it remains strong, banking secrecy has been loosened somewhat in recent times as Andorra has signed more information exchange agreements.

Living in Andorra

Andorrans are a non-majority in their own country, making up only 20% to 35% of the population. The rest of the population is mostly Spanish, French, and Portuguese, with some other expats living there. The costs of living in Andorra are moderate to high compared to the rest of Western Europe.

Getting a work permit and residence permit is easy once you have secured a job with an Andorran company. The government supplies free, high-quality courses in Catalán, which is the local language and is closely related to Spanish.

Tax rates in Andorra are very low. While it currently has no personal or corporate income tax, the government is under pressure to implement some form of income tax. VAT was introduced in early 2013 at a rate of up to 4.5%.

Conclusion

Andorra is highly recommended for banking and possibly expatriation (due to its location and the low taxes). English works quite well as a tourist, but if you plan to live and work in Andorra, learning Catalán (or at least Spanish) would be necessary.


Streber works as a consultant and director for a wide range of companies and has broad experience in offshore banking, offshore incorporation (formation and maintenance of offshore companies), taxation, privacy, ecommerce, merchant accounts, online payments, and all other things the privacy-minded entrepreneur might find interesting. You can read Streber's blog on offshore incorporation and offshore banking here.

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